The Hindu Business Line : Nokia chooses Chennai — Plans to invest Rs 650 cr in manufacturing facility

CONNECTING INDIA: (From left) Mr Lauri Vesalainen, Vice-President, Operations and Logistics-APAC, Nokia Corporation; Mr Sanjeev Sharma, Managing Director, Nokia India Pvt Ltd; and Mr Raimo Puntala, Senior Vice-President, Operations and Logistics, Nokia Corporation, at a press conference in Chennai on Wednesday. — Bijoy Ghosh

Chennai , April 6

NOKIA Corporation of Finland, a leading mobile handset manufacturer, will invest about Rs 650 crore ($150 million) in a manufacturing plant at Sriperumbudur, near Chennai.

It hopes to start construction on the plant "as soon as possible" to begin production at the new plant, its 10th in the world, in the first half of 2006, company officials told a press conference here today.

Nokia has identified about 210 acres of land at the SIPCOT industrial park in Sriperumbudur and will begin work on the plant once it gets ownership of the land. Nokia's suppliers were also expected to establish facilities in the land allotted to the company, officials said.

According to a Nokia press release, the company expects to begin construction in April. It foresees ramping up the factory gradually and the work force reaching approximately 2,000 employees when production is in full scale.

The release said that mobile penetration in Asia Pacific was expected to be a major contributor to the global mobile subscriber base surpassing the two billion mark in 2006. "India which is set at the heart of the region where mobile communications is growing rapidly was a natural location of choice for the new production facility," the release said.

Company officials would not provide details of the production capacity at the plant or how many of its suppliers would establish facilities in "Nokia Park" or what their investment would be.

Mr Jukka Lehtela, Director - India Operations, Nokia India Pvt Ltd, said the company evaluated various States and chose Chennai because of good support from the State Government, the overall development of the area now and in future, ability of people to work with the company, overall cost level being good for Nokia in the long term and logistics advantage.

In a statement in the Assembly today after the Tamil Nadu Government signed an agreement with Nokia, the Chief Minister, Ms J. Jayalalithaa, said apart from Nokia's investment, its suppliers were expected to invest about $150 million. The project would provide direct employment to 1,200 people and indirect employment to 6,000 people.

She said that the company planned to produce 2.40 crore mobile handsets. The site where Nokia and its suppliers would establish their facilities would be designated as special economic zone, she said.

Asked about the figures given by the Chief Minister and the proposal to declare the park as a special economic zone, Nokia officials declined to state anything. All that Mr Sanjeev Sharma, Managing Director, Nokia India Pvt Ltd, would say was that the company had not discussed production capacity as it was still in a fluid state.

In a statement, the Communications and Information Technology Minister, Mr Dayanidhi Maran, said that Nokia's decision to establish a plant near Chennai was the "outcome of efforts taken by my Ministry with the formation of inter-Ministerial task force under the chairmanship of Secretary (Telecom) in last October, with a view to coordinate with various State Governments."

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